DRIVING VALUE... Ins PIRIng THE FUTURE Annual Report and Accounts 2015 DRIVING VALUE... InsPIRIng THE FUTURE Sacem is one of the world’s leading cultural and creative rights organisations. Our mission is to protect and enhance the value of our members’ rights, and to inspire a strong and sustainable future for our industry. Through leading edge technology, an effective licensing strategy and our regional network we collect €862m annually in authors’ rights (more than €1.3bn including mandates) and distribute royalties to around 293,000 songwriters, composers and publishers around the world. In addition, we play a core role in cultural and artistic development within France and internationally, investing over €56m spent on social and cultural aids to support talent and creativity across all ages, activities and communities. Over the long term, our objectives are to continue to invest in technology leadership and processes to drive efficiency and maximise value for our members, and to support artistic creativity and long-term cultural sustainability. The Dø Songwriters/ Composers/Performers Louane Songwriter/Composer/ Performer Strategic overview Management report Financial statements President’s statement Strategic overview A summary of our activities, 02 Sacem at a glance approach and achievements, the 04 President’s statement role we play in society, and how our business model and strategy 06 Chief Executive’s review enable us to deliver successfully 08 Business review 04 for our members. – Adapting in the digital world – Delivering efficiency for creators Chief Executive’s review – Sustaining culture and creation 16 Market overview 18 Highlights of the year 24 Business model and strategy 06 Management report ADAPTING A detailed report and analysis 28 General information of our operations, markets and 40 Economic position IN THE DIGITal governance, and trends affecting world future development. 10 DELIVERING EffICIEncY for crEATors 12 Financial statements SUSTAINING The audited financial statements and 48 Statutory auditor’s report notes relating to our performance for 49 Income and expenses statement culTURE and the year ended 31 December 2015. crEATIon 50 Balance sheet 14 52 Notes to the financial statements 54 Appendices 64 Glossary Welcome to our 2015 Annual Report. If you would like to learn more about Sacem, please visit our website at: www.sacem.fr/en ANNUAL REPORT 2015 | SACEM 01 Sacem at a glance We are a world leader in a rapidly evolving marketplace, committed to maximising The Avener the value of our members’ rights and to Songwriter/Composer/ delivering the best returns. We invest heavily Performer in technology development, and our innovative systems enable us to collect and distribute royalties efficiently, accurately and fairly. Collections Members Our focus on technology, combined with the effectiveness of the Our core objective is to protect Licensing department and our strong regional network, has enabled our members’ rights, and we are us to adapt efficiently and to stay ahead in terms of our ability to deliver committed to ensuring that we for our members. 2015 saw another record year, with total collections have the best technology and reaching €862.2 million relating to our own members’ rights, and a further resources to support and sustain €457 million in mandates from other societies. their work. At the end of 2015, we had 157,270 members in France and around the world – encompassing 164 nationalities – comprising 151,435 creators and 5,835 publishers. Authors’ rights Mandates Members €862.2m €457.0m 157,270 829.7 862.2 455.2 457.0 153,190 157,270 2014 2015 2014 2015 2014 2015 +3.9% +0.4% +3% Read more Read more page 30 page 30 02 SACEM | ANNUAL REPORT 2015 Strategic overview Management report Financial statements 662,000 Our network Contracts completed by Sacem with almost 500,000 customers of which 23,000 have created an account on sacem.fr in less than 8 months. Martinique Guadeloupe 100m International works and more than 2 million songwriters, composers and publishers represented by Sacem. Reunion Luxembourg 2m Works on which royalties were Monaco Lebanon distributed in 2015 benefitting 293,000 authors, composers and publishers around the world. Distribution Net cost-to- collections ratio We are dedicated to ensuring that we continue to distribute as high a level of royalties as possible, and that these distributions are made accurately We have among the best net and efficiently. cost-to-collection ratios in our industry, and maintain a strong focus on improving this further. We aim to achieve an optimum balance between investment and distributions in order to properly reward creators and ensure cultural and creative sustainability. 15.9% Authors’ rights Mandates €733.6m €451.5 733.6 451.5 686.5 419.6 “Artists’ interests are at the centre 2014 2015 2014 2015 of Sacem’s concerns and I thank them +6.9% +7.6 % for it.” Imany Songwriter/ Composer/Performer Read more Read more page 36 page 34 ANNUAL REPORT 2015 | SACEM 03 President’s statement Laurent Petitgirard FAIR, EFFICIENT AND AccURATE “ DISTRIBUTION IS IN SACEM’S DNA.” 04 SACEM | ANNUAL REPORT 2015 Strategic overview Management report Financial statements We are working hard to ensure the best returns for our members, and to create a sustainable environment in which culture and creativity can flourish. Board focus We are determined to address the Sacem’s Board of Directors has European Commission’s attitude to Board priorities always strived to ensure at least the issue of authors’ rights, and are 80% distribution, where collections working hard to change its approach Governance, transparency are based on identified programmes, to the fair distribution of value to and value thus limiting recourse to surveys authors and creators, which we feel • We are committed to and sundry studies that inevitably currently tends to protect the profits maintaining strong standards penalise works that are broadcast of major multinationals, rather than of governance within Sacem, on a small scale. contributing financially to the works ensuring that our structure on which their prosperity is founded. This commitment to efficiently and procedures meet best distributing fair and accurate rights In the coming months and years, we practice and the expectations to as many songwriters, composers are committed to relentlessly of our members and wider and publishers as possible goes hand articulating the clear fact that those stakeholders. in hand with maintaining a balance who benefit from the creativity of between the costs that are necessary authors and writers must contribute • To enhance transparency. in achieving such high levels of to making their work possible. We have developed a precision, and a reasonable level progressive approach to our of management costs. reporting and the way in which we communicate at all levels 2015 was no exception, with our Laurent Petitgirard Chairman of Sacem’s of the Society, and will documentation and distribution continue to improve. departments working to credit over Board of Directors 2 million works to 293,000 creators Member of the Institute of France • We deliver tremendous and publishers around the world. value to our members and are Record collections determined to ensure that we and distribution continue to maximise returns, particularly in a rapidly evolving Collections rose considerably this digital environment. year, largely thanks to the efficiency of our licencing department and regional network, but also due to • It is also a priority for us substantial reorganisation in terms of to engage positively with processes and investment allocation. regulators, authorities and government in France and Low levels of rights generated in more widely in Europe to some aspects of the digital world – ensure that we can achieve in particular through streaming, and the very best for our members, despite the enormous scale of the our industry and the future digital broadcast of our repertoires, sustainability of culture remains the biggest cause of the and creativity. dichotomy between the increasing and pervasive presence of music in the public sphere and all aspects of daily life, and the relatively low remuneration it generates in some areas. ANNUAL REPORT 2015 | SACEM 05 Chief Executive’s review Jean-Noël Tronc “ SACEM IS ADAPTING STRONGLY TO THE CHANGING DIGITAL AND CREATIVE LANDSCAPE.” 06 SACEM | ANNUAL REPORT 2015 Strategic overview Management report Financial statements In a year of great activity and transformation, we have achieved record levels of collections and distribution. Overview Our transformation strategy Our strategy is also based on strong 2015 was a particularly intense During the year we developed several partnerships with other societies, year for Sacem. We focused on new services accessible from the especially through Armonia. As the accelerating our digital transformation new sacem.fr portal, providing further President of the Board of Armonia, to enhance services to our members illustration of the commitment that we I am convinced that we are stronger and simplify the ways in which have to our society’s modernisation together in our aim to ensure users can pay authors’ rights. and transparency. better efficiency for collective The efficiency of our business management both for licensing 68,300 Sacem members have model is demonstrated in particular and processing. registered their own space on the by the strong level of authors’ rights website and use the online services. Armonia has flourished over the monetisation – at approximately last 4 years into a community of €11 per inhabitant, one of the The new electronic version of the 9 European societies – Sacem highest in the industry worldwide. distribution statements, available (France), Sacem (Luxemburg), since October 2015, features an With 12% of our members coming SGAE (Spain), SIAE (Italy), Sabam unprecedented level of detail and from outside France and representing (Belgique), Artisjus (Hungary), SUISA a recap of distributions relating 164 nationalities – and with online (Switzerland), SPA (Portugal) and to the dissemination data across all licenses that cover more than AKM (Austria).